Long Island Business News “Vandals Move In”
The Long Island Business News ran an article in which Robert Klein, CEO of Safeguard Properties, was quoted.
Vandals move in
By Michael H. Samuels
Friday, August 8, 2008
Property preservation companies on Long Island and nationwide are so overwhelmed by the high number of foreclosures that an increased number of abandoned homes are falling victim to vandalism, burglaries and raucous spring break parties that cause tens of thousands of dollars in damage.
“Sometimes, initially, when we go out there the first time, we are finding that these homes have already been vandalized,” said Robert Klein, chief executive of Safeguard Properties, a national property preservation firm. “We are taking a very, very active approach. But with the volume of foreclosures, we need to stay on top of it.”
He said mortgage lending and property preservation firms saw the increase coming and hired additional contractors to inspect and maintain homes.
Banks and other mortgage lenders hire firms such as Safeguard to inspect and maintain homes after they reach foreclosure, said Tom Kelly, a spokesman for JPMorgan Chase and Co.
Kelly added that banks do not want homeowners to foreclose and would prefer to help owners keep or sell their homes. The preservation companies, Kelly said, protect the value of the property while it?s vacant.
But some homes fall prey.
Georgia Westcott, a Babylon-based Realtor, said a spring break party — the empty beer bottles were a dead giveaway — damaged a long-vacant West Babylon home. The wreckage, estimated at $20,000, included damaged sheetrock.
It was obvious the house was chosen because it had been left empty for a long time, she added.
“There was obviously malicious damage,” she said. “In the case of these homes, no one is going in to fix it. That makes it harder to sell and it just sits in the neighborhood.”
She said at many homes, break-ins lead to ruined heating systems, making the property nearly impossible to sell.
Most lenders won?t approve a loan on a home without heat, she said.
Property preservation firms are supposed to prevent the break-ins. Typical maintenance performed by such companies includes boarding up broken windows, placing a tarp on leaky roofs, changing the locks and mowing the lawn twice a month, Klein said.
Safeguard, with 6,000 contractors and 500 employees nationwide, performs 800,000 inspections and work orders on a monthly basis.
He estimated that the lending services industry spent more than $1 billion since the beginning of 2007 securing and maintaining foreclosed homes.
But Realtors on Long Island said not enough is being done.
Instead, they are finding squatters in some homes, copper wiring missing, granite countertops removed and heating systems destroyed.
It?s especially a problem in Suffolk County, which boasts the highest number of foreclosed homes in the state. Nassau County is No. 2.
Recent numbers show that there are more than 8,055 subprime loans in foreclosure in Suffolk, and more than 4,881 in Nassau.
Estimates are that as a result of the foreclosures, Suffolk?s property values could decrease by between $1.2 billion to $2.9 billion, said Suffolk County Legis. Wayne Horsley, D-Lindenhurst.
In addition, property values of homes within an eighth of a mile of a foreclosed home typically dip between 0.9 and 1.136 percent, he said.
As a result, real estate agents here are buddying up, afraid to enter foreclosed homes alone after a number of them found homes burglarized or damaged.
“We are seeing whole communities near the state of foreclosure,” Horsley said. “These houses are boarded up. Banks have walked away from them. The former owners have walked away from them. Grass is growing over 3 feet tall. (Agents) are walking into a situation that may be very dangerous.”